North America's largest steel mill has a plan to reduce emissions and it's a perfect example of why carbon capture is so controversial

• US Steel's plant in Gary, Indiana, aims to deploy carbon capture to reduce its carbon footprint by 2026.
• The technology will capture 0.5% of the steel mill's carbon dioxide emissions.
• Climate groups and some scientists say carbon capture is unproven and will worsen global warming.

A more-than-century-old steel mill in Gary, Indiana, plans to be a testing ground for a controversial climate technology.

Carbon capture is coming to US Steel's GaryWorks plant on the south shore of Lake Michigan, which churns out the steel that shapes modern life, from buildings and bridges to cars and wind turbines.

All that production comes with an environmental cost. GaryWorks is Indiana's largest polluter of carbon dioxide, federal data shows. US Steel said it can cut those emissions by about 0.5% a year by 2026 using technology from the company CarbonFree. If completed, the project would be the first commercial carbon capture at a steel plant.

"It's progress, not perfection," Erika Chan, US Steel's head of sustainability, told Business Insider. "We're excited about the possibilities and potential."

That potential is up for debate. Many climate advocates and some researchers warn that carbon capture is an unproven distraction from other solutions that could rid steelmaking of a lot more fossil fuels and unhealthy pollutants. But those solutions are also in the early stages of development, and backers of carbon capture say curbing some emissions now is better than none at all.

There's a lot at stake in the race to clean up steelmaking. Globally, the industry accounts for 8% of emissions. It's also one of the hardest to make green because it requires a lot of power, heat, and coal and iron ore in most cases. Governments and companies are now pouring billions of dollars into projects trying to solve the problem.

For its part, CarbonFree will spend about $150 million to build out its technology at GaryWorks, according to CEO Martin Keighley. He said his company can earn "strong returns" by selling calcium carbonate, a substance made from the captured carbon and other chemicals, to manufacturers of paint, paper, plastic, and pharmaceuticals. Once operational, CarbonFree can also claim about $3 million a year in federal tax breaks.

Keighley said an outside firm is vetting the carbon capture project at GaryWorks to verify that it will reduce emissions, even though a small amount of gas will be used to power the system.

The company — which counts BP among its investors — won't sell the captured carbon from GaryWorks for use in oil and gas production, Keighley added.

Most of the carbon captured at industrial sites today is piped to oil fields and injected back underground to squeeze out more oil, according to the EPA. This fuels climate advocates' complaints that the technology will extend the life of the industry most responsible for the climate crisis.

'Small drop in a very big bucket'

Ben Inskeep, the program director of Citizens Action Coalition of Indiana, told BI that even if emissions reductions are realized at GaryWorks, it will be "a small drop in a very big bucket."

"It's not a viable pathway to decarbonize GaryWorks," Inskeep said of carbon capture. "A lot of really terrible pollution will continue and this carbon capture project won't address the magnitude of the problem."

Aside from being the top carbon dioxide emitter in Indiana, GaryWorks is also a top producer of other harmful air pollutants like carbon monoxide and particulate matter. The mill is among just 10 in the country still using blast furnaces — the dirtiest way to make steel because they burn coal and iron ore. The residents of Gary, who are majority Black, are suffering from the health effects, Inskeep said.

"We've been advocating for truly sustainable steel that moves away from the blast furnaces," Inskeep said.

Most American steelmakers have switched to cleaner electric-arc furnaces, which melt down scrap metal into new steel. There's also emerging technology that could avoid coal and natural gas altogether by using green hydrogen and renewable electricity — though it hasn't reached commercial scale.

Chan said both of those strategies are included in US Steel's goal to have net-zero emissions by 2050. She noted that US Steel acquired and expanded a site in East Arkansas with electric-arc furnaces that have 70% to 80% lower emissions than blast furnaces.

Those projects require a lot of capital, Chan said. CarbonFree's technology doesn't require US Steel to make new investments.

Another American steelmaker, Cleveland Cliffs, in March announced it planned to spend about $1.4 billion in Ohio and Pennsylvania to replace a blast furnace with a "hydrogen-ready" plant and electrify other furnaces. The plan is contingent on a potentially half-billion-dollar grant from the Department of Energy.

Inskeep said he'd like to see US Steel follow a similar path.

"These are companies making billions of dollars in profits a year," Inskeep said. "US Steel is in the process of being acquired, potentially. It's very capable of making very large investments."

Chan said she couldn't comment on negotiations with Nippon Steel, a Japanese rival

trying to take over the company. However, both are aligned on making climate action a priority, she added. The deal is under review by national security regulators, although President Joe Biden and The United Steelworkers union have opposed it.

Meanwhile, CarbonFree aims to start running its carbon capture system at GaryWorks in 2026 and hopes to expand it over the 20-year agreement.

"I believe strongly that in the next 20 to 30 years, we will still be releasing Co2 from industrial steel, cement, refineries, and plastic making," Keighley said. "Let's stop those emissions now and do something useful with them."